Midnight Notes text on Africa, the middle east, oil etc from 1988.
From the halls of Montezuma to the shores of Tripoli
- US Marine Corps Hymn
This is the text of a speech given on May 10, 1986 in a campus symposium at the University of Calabar (Nigeria) on US policy in Africa, with special reference to the then-recent bombing of Tripoli and Benghazi which sparked many student protests in Nigeria, especially in the largely Islamic North. There was much sympathy for the Libyans; their country is, after all, the other major OPEC member in Africa, an oil price "hawk" instrumental in the oil price "shocks" of the 1970s (which made places like the University of Calabar possible), a Muslim state and an ancient terminus of a trans-Saharan trade route originating in Nigeria. Qaddafi was not a lunatic-transvestite-terrorist to the majority of students. On the contrary, the Libyan bombings further confirmed to them the Reagan regime's hostility to Third World political independence that Qaddafi represented. Not surprisingly, the most aggressive anti-US protest was in Kaduna (in Northern Nigeria) where students, predominantly from nearby Ahmadu Bello University, surrounded the US consulate, rushed past the guards and burned the US flag.
My speech aimed to show the necessity of the bombings (from a capitalist perspective) and to explain how they were possible (given the condition of the US proletariat in early 1986). Two years later, a few more comments about the Nigerian consequences of the bombings, their US precedents and the subsequent revelations of the US-Iranian ‘arms for hostages’ deals are in order to amplify and contextualize the speech's analysis.
I. At the time of this writing (early 1988), the real price of petroleum is below its pre-1973 level. The mathematical reason for this is simple. Since late 1985 there has been a 50% decline in the nominal price of oil in dollar terms and a 50% decline in the exchange rate of the US dollar with respect to the other major world currencies. The "fall of the dollar" meant the end of Reaganomics, and the collapse of oil prices put "paid" to all the theories that explained the 1970s' "energy crisis" as a product of resource scarcity. If the dollar and the oil price had not collapsed simultaneously, then the US would most probably have gone into a recession in 1986 or 1987. Let us consider two scenarios: (A) petroleum remained at its real dollar value (in 1985 terms) as the dollar fell in the exchange markets; and (B) petroleum remained at its nominal 1985 price of $28 per barrel. We can generate Table 1:
Trade deficits in the range of those calculated for scenario (A) as well as the increased US domestic inflation rate (in response to what amounts to another oil price "shock") would undoubtedly have led to an increase in interest rates and, according to most standard bourgeois theories, a recession. The effects of scenario (B) would have been milder, but they may well have been substantial enough to threaten a recession. That is, Reaganomics would have ended with a bang and not a whimper, as it did in 1986-87.
What act of grace made this relatively orderly retreat from Reaganomics possible and where did it emanate from? Was it from the stern hands of the Calvinist God who has been made so fat with electromagnetic tears, rants and sacrificial Belt of Reagan's fundamentalist allies? Hardly. The amazing grace shot straight from the home of Allah: Saudi Arabia. For the Saudi oil minister made the decision to drastically increase Saudi Arabian oil production in late 1985. The result: the oil price was below $10 in the summer of 1986, giving the US additional time for adjustment.
Why such ecumenical zeal in Muhammad's embrace of Calvin? Why should the children of The Prophet deprive themselves to secure the salvation of the infidel? But halt. . . let us be a bit dialectical. The Saudi Arabian ruling class only sits on top of the oil fields, its wealth is no longer determined by that oil and its sale. Through its investments in the US and Europe (largely as a result of the recycling of the famous 1970s "petro-dollars"), the Saudis are now more dependent upon the collective health of Euro-American capital than upon the immediate sales receipts of petroleum. A recession in the US or Europe would have a more decisive effect on those subtle smiles in Riyadh than a gyration in the oil market. A mere whispered prayer from Reagan would have been enough to convince them of the need for an oil price collapse.
II. This "need" was predicated on the fall of the dollar. Why did the finance ministers of the major capitalist nations agree to this fall in Seoul in September 1985? The main interposing events for us were the insurrections in the cross-roads of South Africa.
The struggle of the "comrades" was so infectious that it touched off a series of sit-ins and demonstrations in the US in 1984-85 (recounted in Midnight Notes #8, 1985) for corporate disinvestment from and an economic boycott against South African capital. For the first time in the Reagan period, the campuses and official by-ways were "hot." It proved, however, rather easy to stop this phase of the US movement. On May 13, 1985 a bomb packed with C-4 explosive was dropped on a MOVE house in Philadelphia. Six adults and five children were murdered that day at 6221 Osage St., while sixty-one surrounding row houses were totally destroyed or gutted by the bomb, leaving 250 people homeless. All the dead and homeless were Afro-Americans.
It was a terrible test . . . and American officialdom waited to see what would happen. The Black movement and the anti-apartheid student movement in the US "passed" the test and effectively accepted the government's pronouncement that MOVE was an "urban terrorist" group deserving massacre. What was angrily rejected from the mouth of Botha and Buthelazi passed like honey from the mouth of the FBI (which supplied the C-4 explosive) and Black Philadelphia mayor Goode, viz., that there were good Blacks and bad ones and the latter were to be totally annihilated. The MOVE bombing did for the disinvestment movement what the Kent State-Jackson State massacres did for the anti-Vietnam war student movement: the state drew a definitive line beyond and within the movement which the movement could not cross. The success of the MOVE bombing (dead babies and all) made the decision to bomb Tripoli and Benghazi a matter of drawing a simple corollary for Reagan and company a year later.
In South African townships, where MOVE bombings were a daily affair, the insurrection drove forward, deepening the South African economic de-pression. By 1985 the rand collapsed on the international money market, the price of gold dropped to $330 per oz. (compared to $800 + per oz. in the late 1970s), the trade deficit was $5.5 billion, agricultural production was 33% less than in 1984. . . and the loans that the South African government took out to help them ride out the early 1980s recession were coming due.
In August 1985, in the midst of a "state of emergency," South African capital decided to play a game of "chicken" with international capital by declaring a debt-payment moratorium. With the "Third World Debt Bomb" about to explode, the South African moratorium was a decisive gamble. The Reagan administration had to choose: Either to tighten the financial screws, thus threatening the financial foreclosure on South African capital and reducing its resistance to the Black struggle; Or to accept the moratorium by easing the terms of payment, especially by reducing the value of the dollar.
Why should South African debt cause such a crisis? Brazil, Mexico, Argentina and Nigeria did not. The answer does not lie in the so-called "strategic minerals" of the South African soil. Rather, South Africa is the self-conscious golden temple of the Nazi organization of labor power dominating the planet. If the temple were desecrated by a successful Black revolt, the demoralizing ideological and political-economic effects could be catastrophic for world capital. (For example, it might stimulate the de-mise of the crypto-gold standard.) The struggle in South Africa is not the last anti-colonial struggle, it is the prime anti-"post modern" struggle and hence one Reagan and his class cannot afford to lose. That is why in September 1985 Reagan had to derail his whole accumulation strategy . . . on that "day the dollar die" so the dollar could live again.
III. Saudi Arabia, in the short run at least, could decisively set the world petroleum price alone. It is the "swing producer, but it is not located at the tip of the crescent moon. A huge, sparsely populated country with its oil work force made up of Shiites and Palestinians, it is surrounded by a "sea of troubles." Shiite Iran across the Persian Gulf, South Yemen to its southern borders, Ethiopia and Africa in civil war to the west, and the Palestinian struggle to the north. This sea swells in once a year during the hadj, and millions of troubled pilgrims pour over the political dikes into Mecca. How can Saudi Arabia's rulers protect themselves from the reaction of the two OPEC "hawks," Libya and Iran, when it pushes the oil price into the abyss? The US could promise more radar planes and missiles, but the real problem is on the holy ground in the endless coming and going of the pilgrims.
Rambo on the Barbary Shore describes the oil price context of the Libyan bombings: they were military warnings to Qaddafi not to push the Saudis off their course. The subsequent US and US-inspired French intervention in Chad, which led to the apparent decisive defeat of Libyan forces in Northern Chad in the spring of 1987, continued the purely military pressure.
But what of Iran? The Iran-Contra information, for all its discretion on many details and connections (thank God!), makes it clear (for those who can see the desert from the sand) that those who were central in the organization of the April 1986 Libyan bombings landed in an unmarked airplane in Teheran airport on May 25-28, 1986, for consultations with high Iranian officials. Indeed, between August 1985 and October 1986, the US government contracted to sell at least 2000 anti-tank missiles, 120 anti-aircraft missiles and spare parts for about $100,000,000. Bombs on Qaddafi, missiles for Khomeini? A paradox? A piece of 'madness' from the Poindexter-McFarlane-Casey-North junta?
I suggest that the arms (and "intelligence" (sic!)) shipments not be interpreted as an "arms for hostages" deal, but as part of an "arms for oil price compliance" deal. This interpretation would explain the "enigma" of the affair: why did the Reagan-NSC-CIA regime risk so much in terms of "prestige" for so little, i.e., the release of a few hostages? If the reward was instead the avoidance of an economic collapse at home, we can at least stop treating these agents of international capital as plain silly . . . however plain brutal and demonic they are.
This is not what the sordid organizers of Reagan's junta claim as the motivation of their dozens of dreary meetings with equally sordid Iranian, Saudi and Israeli middlemen and small Shiite theocrats in hotel rooms and toilets across the Eurasian land mass. It was all for the hostages they said. Are they lying?
We have no midnight bugs nor poly-graph tests to go beyond the "public record." All we can do is note the circumstantial evidence: the arms shipments spanned the period of the dollar's fall and the Saudi moves to subvert the oil price. Further, on examining, with much reluctance, boredom and a pure sense of REVOLUTIONARY DUTY, the Iran-Contra material, we note National Security Decision Directive (NSDD), "US Policy Toward Iran," of June 1985, drafted by Howard R. Teicher, who was on that secret mission to Iran a year later. This NSDD is called the "intellectual formulation" of the arms deals with Iran by the Tower Commission Report (cf. B-6-B-10). When the goals of the policy were listed, among "four immediate interests" is "(3) Maintaining access to Persian Gulf oil and transit through the Gulf of Hormuz." And in the list of seven "longer-term goals" are "(1) Restoration of Iran's moderate and constructive role in the non-Communist political community, the Persian Gulf region and 'the world petroleum economy'," and "(7) Iranian moderation on OPEC pricing policy" (p. B-8). There is no specific mention of hostages in the NSDD.
Of course, as one reads most of this stuff (a task which is an additional form of CIA torture!) there is no more mention of oil. It's all "hostages," "hostages" and more "hostages". . to the point that boredom turns to paranoia and one wonders if "hostage" is a code word. For all the talk of hostages, only three were released (four, if you include the corpse of CIA agent Buckley) during the whole August 1985-November 1986 period. On the other side, the unsaid word, "oil," underwent a substantial change: in August 1985 it was $28pb, in November 1986 it was $13pb. Perhaps we might say that the real hostages were not in Lebanon. They were the international bankers, stockbrokers and government officials in NY and Washington. For these hostages the anxiety and obsession of the Iran operation would be palpable and it did bring results: the "crash" was delayed for at least two years. No wonder why no one who "counts" wants to throw the book at the North-7ulu' Poindexter-Teicher lot!
IV. This speech was given in another OPEC country, Nigeria, at a time it too experienced a version of the hostage scenario... but it was the Nigerian workers and peasants who were the hostages then. The Nigerian government was in debt for about $20 billion to international banks and foreign commercial lenders. The IMF offered a $2 billion "structural adjustment loan" to "ease" repayment, on the conditions that (1) the Nigerian currency be devalued by more than 50%, (2) the domestic price of gasoline be doubled, and (3) a liberalization of trade and foreign investment be introduced forthwith. The IMF threatened a credit squeeze and a halting of imports if the Nigerian authorities did not comply. The government of General Buhari refused, but in late August 1985 General Babangida replaced his colleague in a coup. He immediately declared that the question before his new regime was whether the IMF loan and its conditionalities could be accepted. During the last part of 1985, he called for a "national debate on the IMF." He got more than he bargained for, with boisterous anti-loan demonstrations, reams of anti-IMF newsprint and end-less academic debates. From the palm wine bars to the most decorous policy-making institutes, from the yam farms to the factories of Ikeja, there was an almost universal rejection of the "death pill": the IMF loan and its conditionalities. Babangida (facing the threat of a coup against him) publicly declared a definitive rejection of the IMF loan in December of 1985.
But as the price of petroleum collapsed in January and February 1986, inter-national pressure began to build on the wharves of Europe and the US. Imports stopped and the IMFs curse took effect. An IMF team was to visit Lagos in late April "to assess the situation." There was a general sense of a Babangida double-cross in the streets and universi-ties. The protests against the US bombing of Libya in April were also anti-IMF demonstrations.
The tension built and built until it burst on May 23 at Ahmadu Bello University (ABU). An elite "kill-and-go" police team opened fire on a student demonstration, chasing students through the campus and into a neighboring village, killing more than twenty students and townspeople. After the ABU massacre, police shootings continued throughout the country's campuses, but the students reacted sharply as well. Police stations and barracks were burnt down, policemen were ambushed and beaten, and in Ife students chanting "We are all criminals!" raided a prison, excarcerating dozens of prisoners. In Lagos, the main highways were blockaded for days by students and their street supporters. Finally the Nigeria Labour Congress (NLC) called for a nationwide work stoppage and demonstrations on June 4 to protest the. ABU massacre. Babangida called the military out, ar-rested the NLC leaders, closed the universities, and threatened to call for martial law. By the end of June 1986, "calm was restored." Babangida then verified the students' suspicions: he announced a "state of economic emergency" in light of the oil price collapse and launched a Structural Adjustment Program that, in effect, was based on the IMF conditionalities. Thus did the bombs on Tripoli explode in Nigeria.